Jan 12, 2009 - Issue #145

Alcoa Revisited

Alcoa revisited. Do you not like the way the stock is performing in the face of negative news? Notice, especially, the increase in volume since the beginning of October as the stock stopped declining and basically began moving sideways in a trading range (12.57 - 6.80).

CNBC will begin reporting 4Q08 earnings results with AA scheduled to announce after the close Monday.

Like any company facing adverse economic conditions, AA is adjusting to the reality by lowering costs and expenses in line with revenues.

Big money tends to be 'smart' money. Volume increasing, after a price decline, with the stock moving sideways, classically, represents 'informed' accumulation.

The longer the sidewards pattern persists, typically, the bigger the upward move when the stock finally breaks out to the upside.

Heads Up

W. D. Gann, a keen market observer, although not an astronomer, nevertheless, was fascinated by the apparent coincidence of important market 'pivot points' and astronomical dates. Theories exist for estimating time and price of important market turning points but astronomical occurrences are computed with mathematical certainty.

There is no logical reason why these occurrences should coincide yet, empirically, they have. The 'Full Moon' and 'New Moon', among others, have been cited. Therefore, one might be well advised to be aware of their occurrence. Note: The first 5 business days of 2008 concluded on a 'New Moon' and we all know how that worked out. Coincidence?

1/10 Saturday - Full Moon. Observe market action on Friday 1/9 and Monday 1/12.

1/26 Monday - New Moon.

During the next two weeks, the following Dow components report earnings. Keep a sharp eye out for possible price swings leading up to 'earnings day' (Subject to revision):

1/12 AA.

1/14 (Transportations) AMR.

1/15 INTC.

1/16 (Transportations) CAL.

1/20 BAC, IBM, JNJ, (Transportations) CSX.

1/21 JPM, UTX, (Transportations) BNI.

1/22 C, MSFT, PG, (Transportations) GMT, LSTR, LUV, UNP.

1/23 GE, XOM.

Dow score card for the week ending 1/9/09.

DJ-30: 8599.18 -435.51 -4.82%. The Real World (arithmetical) DJ-30: 35.99 -1.82 -4.82%.

UP: 3, Down: 27.

Trends (weekly charts): This is the subjective part.

Rising (Generally Higher Highs/Higher Lows) 2 (-7) 7%:

+*HPQ, +*KFT.

Consolidating (Generally Lower Highs/Higher Lows) 25 (+4) 83%:

-*AA, AXP, -*BA, BAC, C, -*CAT, CVX, DD, DIS, GE, GM, HD, -*IBM, INTC, -*JNJ, KO, -*MCD, MMM, -*MRK, MSFT, -*PFE, PG, T, -*UTX, XOM.

Declining (Generally Lower Highs/Lower Lows) 3 (+3) 10%:

-*JPM, -*VZ, -*WMT.

+/- denotes change of direction.

* denotes change of category.

Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!

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